Chicago Boyz http://chicagoboyz.net Some Chicago Boyz know each other from student days at the University of Chicago. Others are Chicago boys in spirit. The blog name is also intended as a good-humored gesture of admiration for distinguished Chicago boys including those pictured above. Tue, 06 Jan 2009 00:43:45 +0000 http://wordpress.org/?v=2.5.1 en Nuclear Proliferation, One More Thing to Read About and Worry About http://chicagoboyz.net/archives/6588.html http://chicagoboyz.net/archives/6588.html#comments Mon, 05 Jan 2009 23:41:10 +0000 Lexington Green http://chicagoboyz.net/?p=6588 Tom Barnett linked to this really good article entitled “Hidden Travels of the Atomic Bomb”. The article had this awesome graphic.

The article is based in part on this new book. I read the article, my hand hovered over the mouse. You know how this ends.

I bought the book.

When will I ever be able to read it? Who the heck knows. I hope so.

(Cross-posted at Antilibrary)

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What Year is This? http://chicagoboyz.net/archives/6587.html http://chicagoboyz.net/archives/6587.html#comments Mon, 05 Jan 2009 21:53:24 +0000 David Foster http://chicagoboyz.net/?p=6587 …could someone please remind me?

Because based on the images and stories below, it seems like it might be 1932 in Germany, as Nazi street thugs work to complete the destruction of the Weimar Republic.

Or it might be 1928 in one of those American cities where the Ku Klux Klan is running rampant.

Here are reports and videos from some of the anti-Israel (and often openly anti-Semitic) demonstrations that have been held around the world since Israel launched its Gaza incursion:

San Francisco…also this

Melbourne, Australia

Anaheim

Fort Lauderdale

Chicago

Dublin, Ireland

Holland

Paris

New York City

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A Change in the Social Order http://chicagoboyz.net/archives/6582.html http://chicagoboyz.net/archives/6582.html#comments Sun, 04 Jan 2009 20:33:19 +0000 Carl from Chicago http://chicagoboyz.net/?p=6582 Old Man Young Wife

A recent NY Times article highlighted the impact of the financial crisis on Ireland, a country which had previously been riding high on a property boom (and also low tax rates and generally sound economic policies).

There is a photo of a property tycoon and his lovely wife (recently married), 20 years his junior, above. From the article:

The Celtic Tiger my be dead and if the banking crisis continues I could be considered insolvent. but the one thing that I have is my wife and children - and they can’t take that away from me

No, Mr. Tycoon, THEY can’t take her away from you, but your real risk is that she’ll leave on her own.

The picture of an older executive and his hot young wife, 20 years his junior (presumably wife 1.0 was paid off and is out of the picture) is everywhere in the high finance pages. A lot of these guys, for all their tales (they tell) of how they started off humbly, have immense egos and probably actually believe that the reason that an attractive, far younger woman is with them is due to their intrinsic worth.

But it isn’t their intrinsic worth, it is often their wealth. His new, shiny wife is a gossip columnist, and apparently likes expensive things, like a 2 week cruise in a giant yacht with 20 of their closest friends.

It will be interesting to see what the social order looks like when these formerly VERY wealthy men can’t provide all the luxuries, nannies, houses, and other requirements of their high maintenance, younger wives. Will the wives stand by their (grey) men, or go in search of more age-appropriate mates (or a different, older, rich one).

There have been articles about the impact of the financial crash on families, and it is in poor taste to laugh at the misfortune of others. I did have a little chuckle, I admit, when I read an article about the reaction of a laid-off Lehman employee’s wife that “This wasn’t the Plan!” when they had to downsize out of their McMansion and start living within their reduced means. I could see that she traded her biggest asset, her looks, with the expectation of receiving economic gravy in return, and she was calculating that she had received the short end of the deal. Unfortunately, he isn’t getting any richer, and you aren’t getting those years back, baby.

Cross posted at LITGM

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“New” Workout Systems http://chicagoboyz.net/archives/6581.html http://chicagoboyz.net/archives/6581.html#comments Sun, 04 Jan 2009 19:07:18 +0000 Dan from Madison http://chicagoboyz.net/?p=6581 This video is insane.


That woman was doing those presses of her body weight and it is very demanding. It takes complete physical fitness of almost all parts of the body to accomplish fifteen of those reps.  Arms, back, legs.

She does Crossfit, an interesting workout system.

As an aside, I think it is very cool that she is working out in the great outdoors.  Probably California.

I have been doing Muay Thai for coming up on two years now and enjoy it immensely.  But that isn’t all I do.  I also run, bike, and am now starting to dive into some Crossfit type training.  Our gym, primarily a martial arts place, is also beginning to incorporate cross training into what the professional fighters are doing.  The gym is even offering a separate class for this type of training, hoping to take a bite out of some of the health club business.

I guess I don’t know the proper verbage for it, but I am thinking that varying your training is the way of the future.  There are many different systems that do this.  They combine cardio, strength, and all the rest.

I suppose this stuff was around while I was in high school, but it wasn’t marketed nor done on a large basis AFAIK.  I would bet almost all of the elite athletes are doing some sort of cross training now.

This is pretty exciting stuff for a workout nut like me, keeping things interesting and tough.

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This is kind of neat. http://chicagoboyz.net/archives/6580.html http://chicagoboyz.net/archives/6580.html#comments Sun, 04 Jan 2009 02:34:18 +0000 Jonathan http://chicagoboyz.net/?p=6580


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Private Equity http://chicagoboyz.net/archives/6570.html http://chicagoboyz.net/archives/6570.html#comments Sun, 04 Jan 2009 00:12:07 +0000 Carl from Chicago http://chicagoboyz.net/?p=6570 Private Equity Superman

Recently I wrote about the troubles in hedge funds, where easy money in terms of 2% of assets and 20% of profits (easy to find when the market was moving up) has evaporated. Another field where someone a few years out of (an elite) college can make millions is… private equity.

Wikipedia has a decent summary of private equity. Private equity typically consists of taking a public company private by purchasing their equity shares, taking actions to increase the value of the company, and then re-launching the company back in the public markets and “cashing out”. Another path to private equity consists of taking equity stakes in start up companies (like the famous venture capitalists in the dot.com era) and then earning profits when the company goes public. Often the private equity firms raise “funds” with a time horizon, typically ten years, where they invest the money in a variety of investments and then the money is returned to investors at the completion of the fund, whether it results in new profits or losses.

Along with hedge funds, private equity made up a large component of the “alternative investments” that many endowments and wealthy individuals started to invest in en masse in the late nineties and into the current decade in search of higher returns. Typically these sorts of investors put their money into public market equities, debt and real estate - this “alternative investments” were supposed to bring higher returns and also not be not correlated with equity, debt and real estate.

Let’s start with the private equity plan which consists of purchasing public companies, taking actions to increase their value, and then re-launching them in public markets. An excellent summary of the troubles facing these types of buy-out firms was in a recent issue of Financial Times titled “Private Equity Must Prove Its Value” by Luke Johnson, who runs a private equity firm himself.

“It is not just investment banks and hedge funds that must reinvent their business model. Private equity has to do things differently in the future, otherwise backers will disappear, the money will dry up and credibility for the profession will be destroyed.”

There is a popular conception that many public companies are poorly run. Managers are looking out for themselves, worrying about their own compensation and perks, and not focusing on the shareholder. This is summarized in the “principal-agent problem” which has been researched at universities and was a core element of my business curriculum.

The theory is that if managers have a true stake in the company which aligns themselves with the goals of shareholders, they will increase the returns overall. In practice this usually has the following elements:

1) fire most of the existing management and many of the staff (become more productive)
2) close down non-performing business units (sacred cows)
3) bring in new management who will be compensated in some sort of equity fashion so that they make huge profits if the company does well or make little money if they don’t
4) look for “hidden assets” that can be sold to raise value, such as real estate, headquarters buildings, or long term leases at below market rates

In order to make the purchase of the company in the first place, the private equity firm usually raises a lot of debt. Debt used to be easy to come by; you could raise billions from banks or investors at reasonable rates (say 5-7%). It was also assumed that you could refinance existing debt easily and the markets were liquid. The debt was often “covenant lite” meaning that it didn’t require limitations on debt levels or mortgaging existing assets (i.e. the lender would have first “dibs” on assets like factories and land if the company went bankrupt).

Many of the companies that were purchased in this manner have ended up in bankruptcy recently, or even been liquidated. Prominent bankruptcies include Mervyns, Bennigans, Linens N’ Things, and many others. This is likely the tip of the iceberg and I would expect to see many more bankruptcies such as this in the near future.

Often the companies were not changed significantly; they were leveraged up with debt, the private equity owners gave themselves large dividends, and then they were hit by a business downturn which swamped the companies. The private equity owners often didn’t bring much to the table in terms of OPERATIONAL innovation; they did bring financial “innovation” in the form of higher debt and leverage. It is likely that the fact that companies which were reasonably healthy when purchased (Mervyns) ended up being liquidated (with many of the staff members receiving almost no severance) will hurt the already-poor image of these private equity firms.

The other type of private equity (broadly defined) consisted of investing in early stage enterprises, and then supposedly earning big returns after they went public in an IPO. The “classic” cases of this type are firms like Netscape, Google, etc… where the early investors pocketed huge returns. This model assumes a few things - 1) many of the investments won’t pan out 2) there is a liquid, exit market for IPO’s to earn the big returns 3) the venture capital backers have contacts and knowledge that will help the odds of a given startup to become more successful 4) this model raises money and then pays it out to investors over a decade or so, and you can’t judge the “true” returns until near the end.

This (unfortunate) photo shows a big private equity investor dressed up as superman during the height of the boom… and how things are really going now. While the “leveraged buyout” crew really just gorged on cheap debt and stupid lenders until the bottom fell out (they walk away rich, either way) the venture capital guys have been crushed by the fact that the IPO market is completely frozen so there is no way to cash out their investments. Likely many of the venture capital ideas were “me too” ideas (such as the rush to cash in on Web 2.0 ideas) and the backers really didn’t bring that much to the table. An interesting alternative were the guys who cashed out with PayPal - here is an article about them - and how they do things differently than the traditional private equity guys by leaving management in place and letting them even cash out a bit along the way, as well as putting in less cash up front and “bootstrapping” the business.

The denting of the leverage buyout model is due to the fact that 1) many of the private equity companies don’t know how to run the businesses, they just know financial engineering 2) the easy money / low interest loans are long gone. The private equity / venture capital guys have been smashed by the fact that the IPO market has seized up and frankly they didn’t back a lot of the winners. Maybe their model is broken, and they should follow up with that Paypal model.

Remember - these guys didn’t just make salaries / bonuses… they made millions, with a cut of all the assets received as well as 20% of any profits received along the way (they are mostly under water now, so they don’t earn the 20% until they cross the high water mark, but they aren’t giving it back). At least the venture capital guys tried to start businesses… the LBO guys were just taking a flyer with the existing employees and customers and rolling the dice. If the bet is bad, no skin off their back.

Cross posted at LITGM

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Now Available: SE’s Reading List http://chicagoboyz.net/archives/6578.html http://chicagoboyz.net/archives/6578.html#comments Sat, 03 Jan 2009 22:39:38 +0000 Smitten Eagle http://chicagoboyz.net/?p=6578 I have written before on the nature of my personal reading program. Since I published that post I have received email and blog comments (both at my personal blog, and at Chicago Boyz) from various people requesting a copy of my reading list.

I have, until now, failed to produce the copy for electronic dissemination. That was partly because of the nature of my list–specifically, it’s a constant work-in-progress. My reading list is actually a compilation of several reading programs, starting with the various US armed forces reading programs. It also includes the reading lists of various military experts and officers, the reading lists of various institutions of learning, and even a few noteworthy reading lists from the blogosphere. This list is lengthy…over 4900 books, articles, films, monographs, and other media, and it’s compilation has taken place over the last six years.

This list was, and continues to be a massive effort on my part, but this effort is worth the trouble. In constructing this list I am able to see with great breadth the nature of writing within my profession. With understanding of the breadth of the scholarship of my profession, I am able to more easily study in depth a given subject area, as well as study tangential subject areas.

I have not really left any subject area out of this list. This program is obviously dominated by works directly related to armed conflict, since that is my profession. But works of broader history, as well as sociology, political science, economics, psychology, business management, philosophy, biography, literature, the hard sciences, and foreign area studies all have their places within this list.

Here are a few meta-notes on the list. It is a Microsoft Excel spreadsheet. The first two columns are the title and author (if any) of the work. The next column (green) specifies the media used. The next three (yellow) columns contain any pertinant notes relating to the work. The next column (cyan) contains any related internet URLs. The next two columns (blue) allow the user to annotate whether the work has been purchased or downloaded, and whether the work has been read. The next column (gray) specifies the number of occurances that particular work has in the reading lists.

The remaining columns contain the individual lists that are compiled into my reading list.

Since the list is stored in an Excel file, the list may be easily sorted by author, title, etc.

SE’s Reading List can be downloaded from this page.

Cross-posted at Antilibrary, Chicago Boyz, and Smitten Eagle.

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Superb Talk by Peter Mansoor http://chicagoboyz.net/archives/6577.html http://chicagoboyz.net/archives/6577.html#comments Sat, 03 Jan 2009 19:55:51 +0000 Lexington Green http://chicagoboyz.net/?p=6577 This video is excellent. It is a talk by Col. Peter Mansoor about the Iraq war. Even the Q&A is good. Col. Mansoor was a brigade commander in Iraq, and he is now a military historian at Ohio State. He wrote a book about his experiences, Baghdad at Sunrise: A Brigade Commander’s War in Iraq. After listening to this talk, I am going to read his book as soon as I am finished re-reading Clausewitz. The lecture is over 90 minutes, including Q&A. The video portion is just Mansoor standing at a lectern. So, it is easy to just have the audio going while you do other stuff. You lose nothing without the video.

Highly recommended.

UPDATE: The talk is extremely critical of the Bush administration, Rumsfeld and particularly Bremer. If you don’t want to hear that criticism, don’t listen.

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VALKYRIE–Brief Review http://chicagoboyz.net/archives/6576.html http://chicagoboyz.net/archives/6576.html#comments Sat, 03 Jan 2009 16:16:46 +0000 David Foster http://chicagoboyz.net/?p=6576 Went to see the film last Tuesday, and I agree with Lex that it is well worth seeing. Cruise does a credible job as Stauffenberg, and most of the acting is well done, although the mix of accents…a lot of American English and various flavors of English-English, plus a bit of German…was slightly bizarre. I was particularly impressed with Halina Reijn’s portrayal of a minor character, Margarethe van Oven (secretary to the conspirators.) She had almost no speaking lines, but has a wonderfully expressive face, and uses it well to portray her character’s emotions.

One aspect of the film, though, seems to me to be unjust and historically inaccurate.

Erich Fellgiebel, who commanded army communications, is portrayed in the film as a man who joined the conspiracy only after being browbeaten into doing so by Stauffenberg, and is also portrayed–alone among the conspirators–as showing evident terror at the time of his arrest. In essence, the film positions Fellgiebel as an unwilling conspirator and a coward. I see nothing in the historical record to justify such a portrayal. The real Fellgiebel was already involved with the conspiracy in 1939 (four years before the time period shown in the film.) Following his arrest, he behaved with exemplary courage, withstanding torture for weeks in order to protect subordinates who had not yet been arrested. At his trial, he told the judge (the loathsome Roland Freisler) that he’d better hurry up with the hangings, or he himself would hang before the accused. The real Fellgiebel has little to do with the man portrayed under his name in Valkyrie. There were plenty of real cowards in the Third Reich: it was not necessary to portray a genuinely courageous man in this way.

This is really sort of an action movie, focused on the “what” of the events and the “who” of the individual characters–their actions and their behavior under stress–more than on the “why” of their motivations. Considerable effort was clearly made toward visual realism, with details such as Junkers trimotor transport planes and a reconstruction of a teletype-and-paper-tape-based message switching center (the 1940s equivalent of an e-mail server.) The movie succeeds in maintaining a high level of dramatic interest, even for those who are already familiar with the historical events on which it is based, and should be extremely interesting for those who do not know this story.

Don Sensing has also reviewed this move. See also my post Oster, Stauffenberg, and Valkyrie, on the early history of the conspiracy (which all took place before the time at which the movie begins.)

Don gives the movie 8 out of 10 stars: I’d agree with this.

There remains an opportunity for someone to make a movie about this conspiracy which is more focused on character development and individual motivations.

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Spengler Misses the Point http://chicagoboyz.net/archives/6574.html http://chicagoboyz.net/archives/6574.html#comments Sat, 03 Jan 2009 02:35:12 +0000 Jonathan http://chicagoboyz.net/?p=6574 “Spengler” is sometimes brilliant but sometimes he is way off the mark. His December 25 column strikes me as an instance of the latter.

The United States lived in Lever-Lever Land too long. Like Peter Pan, the country has refused to grow up. The object of the stimulus plans offered by the present and the next US administrations is to return to Lever-Lever Land, that is, to debt-financed consumption. It won’t work. Leverage is for the young, who borrow to build homes and start businesses. The financial crisis forces Americans to act their age, that is, to save rather than borrow and spend.
 
For a world economy geared to servicing the once-insatiable maw of American consumption, that is very bad news for 2009. Recovery cannot begin until Americans have restored their decimated wealth by saving - an effort that will take years - or until the youthful emerging markets start importing from the US, rather than exporting to it.
 
America’s leaders haven’t yet had the required moment of clarity. Its financial leaders still think the problem is a mere matter of confidence. These were the same people who swallowed their own sales pitch.

This analysis is too deterministic, as though an aging US population made economic decline certain. What about tax-rate reductions and other productivity-boosting incentives? Animal spirits aren’t a function of youth alone, but also of having a political and social environment that encourages entrepreneurial risk-taking. Also, what’s with the disdain for debt? If you’re borrowing at X% to make a >X% after-tax rate of return you are winning the game and should borrow as much as you can. And much of the high-yield corporate debt that Spengler frets about wouldn’t be needed if the terrible Sarbanes-Oxley law hadn’t destroyed the US IPO market.

Excessively tight credit, high tax rates, excessive regulation and political uncertainty all reduce investors’ ROR and thus chill productive activity. The solution is simple if not politically easy: repeal Sarbanes-Oxley, reduce tax rates, regulation and government spending. What drove productivity increases during recent booms was an economic environment, combining tolerable regulatory and tax conditions with a competitive market for start-up financing, that made technological and business experimentation a good bet. There may indeed have been a demographic component to it all, but to focus on demographics, debt and leverage is to miss the big picture. Incremental changes in the legal and regulatory environments since Summer 2002 have gradually choked entrepreneurial incentives, and perversely led to election of a new government that promises as a matter of policy to punish business success. (And even if the Obama administration and Democratic Congress govern pragmatically and prudently, the uncertainty they’ve created with their anti-business rhetoric is costly for businesses and individuals who must make investment decisions.) Spengler misses most of this. He also fails to ask why many countries with younger populations than ours are less productive than we are. In truth, productivity is a function not merely of youthful spirits but also of human capital (education, cultural values and societal institutions), physical capital (plant, equipment and infrastructure), investment capital and markets, and of taxes and governmental policies that encourage or discourage productive activity.

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I Like Things That Don’t Happen Very Often http://chicagoboyz.net/archives/6571.html http://chicagoboyz.net/archives/6571.html#comments Fri, 02 Jan 2009 21:34:06 +0000 Dan from Madison http://chicagoboyz.net/?p=6571 According to CNN, Governor Blago has the right to access the Senate floor. Wouldn’t it be interesting to see that clown walking and talking amongst the Senators? He is crazy enough to do it.

Roland Burris, the *legally appointed* Junior Senator from the State of Illinois does not have legal access to the Senate floor, it appears.

The aide familiar with Senate Democratic leaders’ plans said if Burris tries to enter the Senate chamber, the Senate doorkeeper will stop Burris. If Burris were to persist, either trying to force his way onto the Senate floor or refusing to leave and causing a scene, U.S. Capitol Police would stop him, said the aide.

“They (police) probably won’t arrest him” but they would call the sergeant-at-arms,” the aide said.

When asked about what would happen if he shows up and tries to be seated, Burris told the Chicago Tribune that he’s, “not going to create a scene in Washington.” He added, “We hope it’s negotiated out prior to my going to Washington.”

Burris told CNN that, “We’re certainly going to make contacts with the leadership to let them know that the governor of Illinois has made a legal appointment. And that I am currently the junior senator for the State of Illinois. And we’re hoping and praying that, you know, they will see the reason in appointing me as a very qualified, capable, able and ready-to-serve individual.”

Coincidentally, the senate sergeant-at-arms, Terrance Gainer, served in the Illinois government at the same time as Burris. Gainer was the director of the Illinois State Police from 1991-95. Burris was the Illinois attorney general from 1991-95.

Senate Democratic leaders, who consider Governor Rod Blagojevich a loose cannon, also have discussed what might happen if Blagojevich shows up on Capitol Hill Tuesday, said the aide familiar with their plans. But the leaders see that move by Blagojevich as unlikely at this time.

This would be a “radioactive” situation, according to the aide, because Senate Democratic leaders could not deny Blagojevich entry, as sitting governors have floor privileges in the Senate. Governors are allowed to walk around the Senate chamber or talk with senators while on the floor, though they cannot vote or formally address the Senate.

Interesting times indeed. As Lex Green has pointed out elsewhere, the Illinois Clown Show is on the road in Washington.

By the way, the comments to that article are pretty interesting.

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Safe Or Cabinet? http://chicagoboyz.net/archives/6569.html http://chicagoboyz.net/archives/6569.html#comments Thu, 01 Jan 2009 19:50:44 +0000 James R. Rummel http://chicagoboyz.net/?p=6569 Glenn posts about personal safes. You know, those heavy metal boxes that are supposed to contain your valuables so thieves can’t carry them off. It seems that sales have jumped.

I have had some experience with safes, the same as just about anyone who is a responsible firearms owner, and thought everyone might be interested in hearing about the basics.

Before we get started, let me caution everyone by saying that safes do not provide a guarantee that your stuff won’t ever be stolen. It simple adds a layer of complexity to the thief’s job. Any safe can be defeated by a determined, well equipped, experienced criminal with a plan and plenty of time.

What I described in the previous paragraph sounds an awful lot like one of those heist movies, where a gang of colorful characters portrayed by photogenic Hollywood stars come together to make the one big score that will set them up for life. Those guys will probably not bother with the safe in your basement, mainly because they know that it isn’t very likely for you to have a few million dollars in cash, let alone that you will keep it in your home safe. If you set it up right, just about any sturdy lockbox or safe will foil the efforts of the casual burglar.

The first thing to keep in mind is that there are two levels of security to consider when buying a safe.

There are types that are merely metal boxes with a lock on them, and they don’t protect your valuables from fire. These are usually referred to as “lockboxes” if they are small, while the larger versions are called “security cabinets”. They are not safes! The word “cabinet” is what should clue you in that you are buying what amounts to a sturdy, immobile suitcase with a lock on it.

cashbox

Then there are metal boxes that have thick walls filled with an insulating material, and they will protect your valuables from fire. They are traditionally known as “safes”. They cost more than the lockboxes and cabinets, but are worth it if keeping whatever is inside them as safe as possible is an important goal.

old_metal_safe

The locking mechanisms used to secure the doors of these security devices range from a Victorian level of technology…,

safe_wheel

…to computerized cypher pads that one could find on the doors leading to a secret weapons lab.

The advantages to the high tech stuff is that it still keeps your valuables nice and safe, and it allows easier and quicker access to the inside of the box. After all, just punching in a 5 digit code is a lot simpler than manipulating one of those little silver wheels with all the numbers etched into them.

But there are also problems, as fellow gun blogger and respected gun writer Michael Bane found out. The electronic locking devices add a much greater level of complexity to the relatively simple task of keeping the lock engaged until the correct combination or code is employed. Greater complexity means that there are significantly more potential failures built in to the mechanism. That is why I have never recommended a safe with an electronic lock to any of my students. Stick to the old fashioned safe wheels and avoid some potential frustration.

Your safe, cabinet, or lockbox also needs to be bolted to something so thieves simply won’t carry it off. Most gun safes come with small holes in the back, a place where bolts can be inserted to secure the box to an interior wall in your house. Make sure that the material or wall in question is made of hardy stuff, as bolting your expensive safe to nothing more than sheetrock is a really dumb idea.

Is there one safe or cabinet manufacturer that I would recommend over all others? Not really. Just about all of them provide the same level of customer service, just about all of them provide the same level of protection for the money. Still, after saying that, there are a few fly-by-night operations I’ve come across over the years. I would suggest that, before you buy, call the number listed on the safe for customer service. If someone answers then I’d say got for it.

Most of my students don’t have much money, but they still need a place to secure their valuables when not at home. I have written in the past about low cost ways to create a lockbox or gun cabinet, with one method costing less than $10.00 USD. Click on that last link and you will find easy, step-by-step instructions to making your own. It won’t be as nice as buying something custom built for the purpose, but it will work pretty well for the money.

(Cross posted at Hell in a Handbasket, my own personal blog.)

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Happy New Year http://chicagoboyz.net/archives/6568.html http://chicagoboyz.net/archives/6568.html#comments Wed, 31 Dec 2008 20:29:06 +0000 Jonathan http://chicagoboyz.net/?p=6568 Best wishes to Chicagoboyz contributors and readers for 2009.

holiday lights

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Diplomacy and Terrorism http://chicagoboyz.net/archives/6566.html http://chicagoboyz.net/archives/6566.html#comments Tue, 30 Dec 2008 23:49:51 +0000 Shannon Love http://chicagoboyz.net/?p=6566 David Bernstein quotes Glenn Greenwald as saying:

Terrorism ends when the causes of it are addressed, typically via diplomatic means.

Greenwald has a point. After all we all remember how successfully we used diplomacy to bring an end to causes of terrorism back in….

…well, I mean sometime we must have…

…nope, on second thought, diplomacy has never brought an end to terrorism. 

Greenwald tries to sell the myth that terrorism represents the desperate acts of desperate people. In fact, terrorism is the tool of power-crazed sociopaths who exploit any pretext in order to murder their way to wealth and power. Terrorists stop only when their leadership is directly threatened, killed or stripped of the ability to attack. When terrorist groups show up at the bargaining table it is only after they have been pushed to the brink of extinction.

Many naive observers point to the IRA as an example of terrorists brought to heal by “diplomacy”. However, the IRA only gave diplomacy a chance after it had been pushed to the brink of extinction. The end of the Soviet Union cut off the IRA’s major source of funds, training and weapons. Covert British operations that began in the ’80s to penetrate the IRA finally bore fruit in the early ’90s, leading to the capture of an estimated 75% of IRA effectives. Most telling for Greenwald’s case, the “causes” of the IRA’s terrorism were never “addressed”. Northern Ireland looks substantially as it did when the IRA was fighting. 

There are no “causes” of terrorism against Israel that can be “addressed”. The cause of the conflict lies in the lust for power by the leadership of the various terrorist groups targeting Israel. They gain power and wealth (Arafat died in Paris with a Nobel Prize and a personal fortune estimated in the hundreds of millions) by manufacturing a conflict with Israel. If Israel grants concessions, the terrorist leadership will simply claim that their attacks drove the Israelis to make the concessions and that if they attack some more, they will get more concessions.

We should remember that for nearly three decades people like Greenwald claimed that if Israel merely ended the occupation of the Palestinian territories it would get peace. Instead it got human bombs and rocket attacks. Ditto for the withdrawal from Lebanon. 

Terrorists stop for only two reasons: (1) They win and graduate to despotic rule (Mugabe), or (2) they’re physically prevented from acting. Israel has decided to go for reason (2). The rest of us should hope it succeeds. 

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The Vile Cynthia McKinney http://chicagoboyz.net/archives/6565.html http://chicagoboyz.net/archives/6565.html#comments Tue, 30 Dec 2008 20:41:34 +0000 Jonathan http://chicagoboyz.net/?p=6565 Traveling to Gaza in a stunt to aid Hamas, she complains because the Israeli navy damaged her boat. I would suggest that she got off lightly.

The activists, organized by the Free Gaza Group, said their 66-foot yacht called “SS Dignity” would defy an Israeli blockade of Gaza and ferry 16 activists and three tons of Cypriot-donated supplies. The supplies are intended to help treat the wounded from Israeli bombings against targets in Gaza, in retaliation for rocket fire aimed at civilians in southern Israeli towns.

She cared not at all when Hamas thugs were daily bombarding Israeli towns in an attempt to kill as many Jews as possible. Only when Israel defended itself was her sense of justice aroused.

Daily life near Gaza:

Moshe Turgeman spent a lot of time in Gaza before the intifada. Not only did he serve in the Israeli army there, but he used to get drinks and hang out in area frequently. “There are good people in Gaza ,” he tells me. Hearing this is rather remarkable because in August 2006, Moshe’s house took a direct hit from a Qassam rocket launched from Gaza . He managed to get his kids to safety but he was injured in the attack. I ask Moshe what life is like in Sderot today. “It’s not life,” he responds. His children are scared, he fears going outside and his disability has made it impossible to work. There were times, Moshe says, when he thought the warning siren was broken because it sounded non-stop for hours. “Forty-eight Qassams fell in a single day,” he says. “The scariest thing is that sometimes they fall without an alert—at any moment.” Moshe knows of what he speaks. One day he was ironing a shirt on the upper floor of his modest apartment. In an instant, a rocket fell meters from him and shrapnel nearly pierced his heart. He shows me the jagged hole in the window next to which he was standing during the attack. “It’s not life” he repeats.

The Commentary article from which the above quote is taken is worth reading in full.

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“Uncertainty Management” http://chicagoboyz.net/archives/6564.html http://chicagoboyz.net/archives/6564.html#comments Tue, 30 Dec 2008 20:23:02 +0000 Jonathan http://chicagoboyz.net/?p=6564 A discussion about the financial crisis, Wall Street, management and accountability at Neptunus Lex. The initial post is merely the starting point for some insightful comments by readers. Worth reading in full.

There seems to be a trend toward diminished accountability for top members of our political and business elites. People who should resign don’t. Leaders who should fire those people don’t. The military still seems pretty good (perhaps it’s no accident that the discussion I linked is on a blog written and frequented by military people). Accountability standards in small business and many professions, where failure tends to be immediate and personal, still seem OK. But things appear to be on the decline in big institutions and government. I don’t know if that’s because government has grown so big and intrusive that it drags down standards everywhere, or because our society has deteriorated, or both. It’s a bad trend either way.

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Bored and Crocheting http://chicagoboyz.net/archives/6562.html http://chicagoboyz.net/archives/6562.html#comments Tue, 30 Dec 2008 01:36:30 +0000 Shannon Love http://chicagoboyz.net/?p=6562 Now for something more than a little strange…

 

The work of German artist Patricia Waller who seems to combine true skill at crochet with seriously warped imagination.

I do find it interesting how we attach certain concepts to a particular medium and find it jarring when we see other concepts rendered in that medium. 

For example, crocheted, pink, S&M gear.

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Driving School! http://chicagoboyz.net/archives/6561.html http://chicagoboyz.net/archives/6561.html#comments Mon, 29 Dec 2008 22:20:07 +0000 Jonathan http://chicagoboyz.net/?p=6561

SurvivorsGraduates are sent for advanced training

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Oster, Stauffenberg, and Valkyrie http://chicagoboyz.net/archives/6560.html http://chicagoboyz.net/archives/6560.html#comments Mon, 29 Dec 2008 21:10:30 +0000 David Foster http://chicagoboyz.net/?p=6560 I haven’t yet seen “Valkyrie,” but I’m pretty familiar with the relevant history, and will be interested to see how accurately it is reflected in the film.

It appears that–as is the case with almost all writing/video dealing with the German military conspiracy against Hitler–the film is strongly focused on the activities of Colonel Count Stauffenberg. It’s easy to see why filmmakers would want to emphasize Stauffenberg’s role and story–with his aristocratic lineage, his good looks, his attractive wife, and his love of poetry (he was a devotee of Stefan George), the man makes a fine dramatic hero. Stauffenberg was a complex individual and a man of many quirks, some of them likeable–like his habit of lying on the rug with his wife and reading English novels together, each waiting for the other to finish the page–and some not so likeable, like his tendency to lose his temper if his boots weren’t lined up precisely by his adjutant. One can see why he would be attractive to writers and movie-makers.

However.

There were quite a few German officers involved in the plot against Hitler, and some of them committed themselves much earlier than Stauffenberg did. Hans Oster, in particular, could reasonably be considered as the driving force behind the whole enterprise. It’s interesting to note that no one playing the Oster role shows up in the cast list for “Valkyrie”–there may be legitimate dramatic reasons for this, but I hope that the movie at least gives credit in some form to Oster’s very important role.

Hans Oster was born in 1887, the son of a Protestant pastor and a highly cultivated mother (who had a great influence on him but who died when he was seventeen.) He grew up as an excellent horseman and a good cellist. Joining the army in 1907, he fought with distinction in the First World War. After the peace was signed, Oster was one of those chosen for retention in the army, which was reduced to 100,000 men by the provisions of the Versailles Treaty.

After his promotion to major, his career suffered a serious blow when he was found to be conducting a flirtation–perhaps an actual affair–with the wife of a senior officer. Oster offered the man a duel “to save honor,” but this was declined, and he was thrown out of the army. In 1933, he accepted a new job in the Abwehr (military intelligence) and his opposition to Hitler quickly solidified as he learned more about what was going on in the new concentration camps and about Hitler’s plans for war. He began to recruit others to the cause. One of his most important targets for conversion was General Ludwig Beck, the Army chief of staff. Like Oster, Beck was a devoted horseman, and on their long rides together, Oster worked to persuade Beck of the evil of Naziism, the absolute catastrophe that would be represented by a new war, and the moral necessity of taking direct action.

Some of those officers who began to consider resistance to the Nazis were motivated–like Oster–by their revulsion at Hitler’s tyrannical and barbarous policies; others were motivated more by practical concerns: they didn’t believe Germany could win a major war. Even among those in the first category, many were opposed–on “moral” grounds or based on their expectations of public reaction–to killing Hitler: one idea was to arrest him and have him declared insane. Oster, though, came very early to the concusion that Hitler must be killed if a coup was to have any chance of success.

In 1938, as the crisis over Czechoslovakia deepened, there was great concern among the German populace and military over the dangers of a new war. Beck, the chief of staff, was not necessarily opposed to German expansionism, but did not believe that Germany was militarily strong enough to take on Britain and France combined, and moreover, he did not believe that the issue of Czechoslovakia was worth a world war. He attempted to organize a “general’s strike,” under which the senior officers would refuse to participate in the planning and execution of an invasion of Czechoslovakia. In a memo to Walther von Brauchitsch, the CinC of the army, he wrote:

Now at stake are final decisions regarding the fate of the nation. History will burden those leaders with blood guilt if they do not act according to their professional and statesmanly principles and knowledge. Their soldierly loyalty must end at the boundary where their knowledge, conscience, and sense of responsibility forbid the execution of an order. In case their advice and warnings fall on deaf ears in such circumstances, then they have the right and the duty, before the people and history, to resign their offices. If they all act together, then it will be impossible to carry out military action.

However, Beck was unable to convince a critical mass of officers to participate in his plan, and he resigned alone in July 1938.

Oster and his circle believed that if Hitler moved to invade Czechoslovakia, and if France and Britain were resolute in their committment to defend that country, the time would be right for a coup. Erwin von Witzleben, a general commanding substantial troops in the Berlin area, agreed to support the forceable removable of Hitler, and Wolf Helldorf, the police president of Berlin, promised neutrality on the part of his police. Another army unit, under the command of Erich Hoepner, was assigned to neutralize the large SS garrison in Munich, The intention was to arrest Hitler and have him declared insane: Oster officially went along with the majority of his co-conspirators on this but secretly planned to have the fuehrer killed “by accident” in the course of the arrest.

The conspirators sent emissaries to Britain, to inform the British government about the strength of the anti-Hitler movement and to emphasize the importance of a strong stand re Czechoslovakia–however, they were unable to overcome the appeasement orientation of the Chamberlain government. The Munich agreement, signed in late September, caused much of the support for an immediate coup to disintegrate. Oster, though, remained resolute in his intention to destroy Naziism.

In the fall of 1939, the diplomat Erich Kordt–who had frequent access to Hitler–came to Oster and offered his services as an assassin. It was decided that a bomb would offer a better chance of success than would a pistol, and Oster undertook to procure explosives and a detonator. Unbeknownst to the military conspirators, a man named Georg Elser–a clockmaker and a socialist–was pursuing his own independent plan to kill Hitler. Elser’s bomb did go off, but owing to a change in plans Hitler was not among those killed. The incident led to greatly increased security around Hiter, making it impossible for Kordt’s plan to be carried out.

In late 1939, Oster began to pass military information about Germany’s plans for an invasion of Western Europe to his friend Bert Sas, who was the Dutch military attache. Sas assured him that this information would be passed to his Belgian opposite number, and Oster surely expected that the information would also reach the French and the British.

The decision to pass detailed military information to an enemy state was extremely painful to Oster, despite his loathing of Naziism–he knew that if the Allies acted effectively on the information he was giving them, it would likely mean the deaths of tens of thousands of German soldiers, among them many of his friends. Nevertheless, he did it. After one session with Sas, Oster unburdened himself to a friend:

It’s much easier to take a pistol and shoot someone down, it’s much easier to storm a machine-gun emplacement, than to do what I have decided to do. And if I should die, I beg you to remain my friend after my death–a friend who knew the circumstances under which I took this decision, and what drove me to do things which perhaps others will never understand, or at least would never have done themselves.

On May 9, 1940, Oster provided Sas with a final update: a massive German attack was about to begin. Using a prearranged code, Sas notified his superiors. An hour and a half later, he was called back by the Dutch chief of intelligence who said, doubtingly: “I have just received the very bad news about the operation on your wife. Have you now spoken to all the doctors?” Sas, irritated at the unbelieving attitude that was being taken toward his information, snapped back: “I don’t understand why you bother me now under these circumstances. You know now. Nothing can be done any more about this operation. I have spoken to all the doctors. Tomorrow morning, at dawn, it takes place.” It wasn’t until 3:00 AM the next day that the Dutch blew up the first of their frontier bridges, and it appears that the Oster/Sas intelligence never reached the French or British commanders.

Throughout the war years, Oster (who was promoted to Major General in 1941) did what he could to assist Jews in getting out of Nazi Germany. In some instances, Abwehr funds were used to pay for the escape of Jews under cover of intelligence operations. These activities led to a detection of financial irregularities on Oster’s part, and he was removed from office in April 1943. The Gestapo does not seem to have been aware that he was helping Jews escape–they believed the financial manipulations were about personal enrichment–and were certainly unaware of his deep involvement in an anti-Hitler conspiracy. Nevertheless, he fell under enough suspicion and surveillance that it became impossible for him to continue is central role in the conspiracy. It was at about this time that Stauffenberg became heavily involved in the affair: to a substantial extent, he took on what had previously been Oster’s role.

In his book To The Bitter End, Hans Bernd Gisevius (a close friend of Oster’s) gives his own view of the characters of Oster and Stauffenberg:

Oster was the officer who had fought most clear-headedly, most resolutely, most indomitaby against the Brown tyranny–and fought it longest. There was a vast gulf between his mentality and that of Stauffenberg, who had shifted to the rebel side only after Stalingrad. These two army men were representative of two different worlds.

I don’t think the above is entirely fair to Stauffenberg—but it certainly is true that that Oster took resolute action againt the Nazis earlier than Stauffenberg and most of the other conspirators, and that his motivations were broader and deeper than those of many.

Following the unsuccessful bomb plot and coup attempt of July 1949, Oster was arrested along with dozens of others. He was executed on April 9, 1945, in the Flossenburg concentration camp. The camp was liberated a few days later by American forces.

Oster’s friend Fabian von Schlabrendorff described him as a man such as God meant men to be, lucid and serene in mind, imperturbable in danger.

There were many in the senior German military ranks who understood what Hitler was and what Naziism was doing to the world, but were unwilling to wholeheartedly commit themselves to doing what needed to be done. Hans Oster stands in strong contrast to such individuals.

In attempting to persuade Halder (his replacement as chief of staff) to take action against Hitler, Ludwig Beck used an equestrian metaphor: as an experienced horseman, Halder should know that he had to throw his heart over the fence.

Hans Oster threw his heart over the fence and he never looked back.

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Incoming Links to this Blog (and Other Feeds) http://chicagoboyz.net/archives/6559.html http://chicagoboyz.net/archives/6559.html#comments Mon, 29 Dec 2008 18:24:32 +0000 Jonathan http://chicagoboyz.net/?p=6559 In the list of feeds near the top of the right sidebar, I’ve added a link to a Google feed that displays links from other blogs to this blog. This feed seems like an improvement over trackback links on individual posts, which are a spam magnet. (And I removed the link to the feed from the Chicago Boyz Forum, which is currently inactive.)

Please note also that each post on this blog displays, at the top of the list of comments, a link to a comments feed for that particular post. There used to be a link in the blog’s upper-right sidebar to a feed that displayed all comments from the blog, but I removed it because I thought it encouraged trolling. I don’t know if this was the right thing to do.

Is the current array of feeds optimal or could it be improved? I welcome suggestions.

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Obama’s Keynesian Error http://chicagoboyz.net/archives/6558.html http://chicagoboyz.net/archives/6558.html#comments Mon, 29 Dec 2008 18:23:36 +0000 Shannon Love http://chicagoboyz.net/?p=6558 Obama wants to spend tax money to “create” jobs in the sagging economy. [h/t Instapundit] He is clearly working from a Keynesian model in which government borrows saved money and hires unemployed people to do make-work. The employed people spend the saved money and the economy revives.

Seems like a good idea except that Keynes was wrong.

Entire libraries have been dedicated to Keynesian theory, but for our purposes we can boil it down to the core idea that the movement of money itself through the economy (as people traded) creates a good economy. In Keynes’ model, recessions and depressions occurred when people saved too much and spent too little. This caused the money to stop moving. Government could “prime the pump” of the economy by taking the saved (and thus static money) and spending it. He famously summed up his idea by saying that the government could stimulate the economy by simply burying large amounts of money in the ground and then letting people dig it up again. The money spent to dig up the money would drive the economy again. 

However, the mere movement of money itself is not what drives the economy. We use money as an accounting tool in order to calculate the relative exchange quantities of goods and services. Money is information. The movement of money allows people to communicate to one another the value they place on different economic activities. Each individual exchange passes information from one human being to another. 

Money communicates information not by its movement by rather by the differences in prices. It is analogous to the way in which analog phone wires carry information by fluctuations in voltage from moment to moment. Keynes was like a naive individual who discovered that phones lines carry information with electricity and then decided that if he pushed more electricity through the line he would convey more information. In reality, all he would get is a squeal. Likewise, arbitrarily moving money through the economy does nothing if that movement does not transmit information about the real value of different economic choices. 

People who spend time digging up money the government buried in the ground do not stimulate the economy. Instead, they introduce information into the economy saying that digging holes in the ground has a higher priority than other things people could be doing. Likewise, Obama’s idea to “create” jobs by repairing infrastructure or building alternative-energy project will merely skew the information transmitted by the money spent to make other activities look less of a priority. Obama’s programs will produce a loud squeal of noise in transmission of economic information. 

We are currently facing a major planetary recession because the government interfered in the economy’s prioritizing by making housing appear much more important that it should have been. Now Obama wants to dump yet more noise into the economy’s flow of information. 

He will make the recession longer and all us collectively poorer in the long run. 

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Good Fences Make Good Neighbors http://chicagoboyz.net/archives/6557.html http://chicagoboyz.net/archives/6557.html#comments Sun, 28 Dec 2008 22:35:31 +0000 James R. Rummel http://chicagoboyz.net/?p=6557 For the past few days, Israel has been conducting military operations against terrorist targets inside Gaza. This is in response to Hamas launching repeated rocket attacks against Israeli civilian targets.

Although very interesting, events are still unfolding so I don’t want to discuss the current chapter of Israeli-Hamas conflict right now. But I thought you might be interested to know that Egyptian border guards have reportedly opened fire on Palestinians that have broken through the border defenses between Gaza and Egypt. (Hat tip to Glenn.)

No deaths have been reported, which indicates to me that the Egyptians really aren’t trying that hard to reseal the border. But I note with a great deal of Schadenfreude that the Egyptians probably wish they had built something like the Israeli security fence. You know, the same barrier that was condemned by Egypt back when construction was beginning.

Will Egypt begin building a similar barrier along their 9 mile border with Gaza? To be frank, I really doubt the Egyptians have the kind of money it would take to construct something as effective. But I think they will start to do what they can to beef up what they have.

The world press wasn’t very sympathetic to Israel when they started to build their security barrier. What do you want to bet that they won’t bother to report any activity by Egypt to seal their own border with Gaza?

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Excellent “Best of” List from The Middle Stage http://chicagoboyz.net/archives/6556.html http://chicagoboyz.net/archives/6556.html#comments Sun, 28 Dec 2008 21:38:46 +0000 Lexington Green http://chicagoboyz.net/?p=6556 One of my favorite blogs is The Middle Stage, written by Chandrahas Choudhury.

Chandrahas writes about literature as well as history, fiction and nonfiction, and very frequently alerts me to books I have never heard of, but which I wish I had time to read. In particular, he writes about Indian history, a vast subject I want to know more about.

His list of best nonfiction for 2008 contains several which might interest the ChicagoBoyz team, and our readers.

I would particularly like to hear about what others think about his choices related to India.

Cross-posted on Antilibrary.

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Pigging Out, Wisconsin Edition http://chicagoboyz.net/archives/6554.html http://chicagoboyz.net/archives/6554.html#comments Sun, 28 Dec 2008 14:49:24 +0000 Dan from Madison http://chicagoboyz.net/?p=6554 A few days ago James Rummel put up a post about the expanding feral pig population. In his post he had a link to a map that showed where the populations of the feral pigs were. I wondered why there were none reported in Wisconsin, and others raised questions about the map.

I would have to now agree with those who said that it was a reporting issue - looks we have them in Wisconsin after all. Here is a page from the Wisconsin DNR site from January of ‘08. Seems they are indeed all over the state.

The position of the Wisconsin DNR seems to be the same as the DNR in Ohio - they want them dead, anytime, anywhere, anyhow. All you need is a small game license and the permission of the land owner to harvest as many of them as you want. If you are a land owner you can harvest them no questions asked.

This is a very good page from the Wisconsin DNR website that describes feral pigs, how they live, breed and feed. Amazing creatures, as they eat just about anything they can get their snouts on. I am sure they are tasty as well, and I just may need to gear up to find out someday.

Don’t forget, if you have photos of wildlife in urban or suburban settings, Jonathan is looking for those and you can find his new blog on the subject here.

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Nice Holiday Podcast http://chicagoboyz.net/archives/6553.html http://chicagoboyz.net/archives/6553.html#comments Sat, 27 Dec 2008 18:23:29 +0000 Lexington Green http://chicagoboyz.net/?p=6553 Right here. Lots of old fashioned and offbeat stuff.

(From Kim Shattuck of the Muffs.)

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